US – update through November 2016

This interactive presentation contains the latest oil & gas production data from 67,189 horizontal wells in 8 US states, through November. Cumulative oil production from these wells reached 6.2 Gbo, while cumulative gas production topped 51.5 TCF.

Oil production dropped in November by about 1% over the previous month, following declines in most basins. Almost 1.3 million bo/d of new production capacity was brought online in 2016 through November, versus just over 2.0 million bo/d in the same period the year before, with about half the number of wells (5264 vs 9885).

Gas production rose in November by 2%, returning close to the average 2016 level of almost 35 BCF/d. This was a similar output as in November 2015. At this rate, these horizontal wells were in November responsible for close to half the total gas production in the US, according to the EIA (34.1 vs 71.8 BCF/d). Gas output has fallen less than oil in 2016, as there was a small shift to drilling gas wells, and because gas declines slower than oil in producing wells.

In the “Well quality” tab we can see the production profiles of all these wells. The top graph shows that the average well performance hasn’t changed dramatically in recent years, apart from an increasingly higher initial production. You’ll notice that the average 2016 well peaks at about 500 bo/d, and is then on a path to do about 50 bo/d after 2.5 years (30 months).

The “Well status” tab gives an overview on how many horizontal wells were put on production each month; from a top of 1400 at the end of 2014 to about 400 around November. This may have been a low point, given the sharp increase in drilling in recent months.

The final tab (“Top operators”) reveals the performance of the 5 largest operators, of which EOG is the clear leader. It increased oil production in October and November with a substantial increase in the number of completions, despite having fewer producing wells than it had at the beginning of the year as the result of divestment in several basins. The other 4 all had lower production near the end of 2016.

The ‘Advanced Insights’ presentation is displayed below:

This “Ultimate recovery” overview provides another view on how production profiles have changed over the past few years. Production rates are mapped against the cumulative production for all wells that started in a particular year.

That most of the gains in recent years happen early on can be seen by the higher tops of those production profiles, and that afterwards they run parallel with earlier years. Therefore, on a percentage basis, these improvements become less over time.

You can see the same effect in more detail when you select to show wells by “Quarter of first flow”. The slightly concave downwards sloping curves indicate that in general, the production profiles follow an hyperbolic decline curve with an exponent (b-value) smaller than 1.

For those of you who have expressed interest in the underlying production data for all these wells: the “Get the Data” page has been updated. Now it is possible to order data for individual states as well, and the process is fully automated.

I expect to have a new post again in about 2 weeks.

Production data is subject to, typically upward, revisions, especially for the last few months in Texas. For this presentation, I used data gathered from the following sources:

Colorado Oil & Gas Conservation Commission

Montana Board of Oil and Gas

New Mexico Oil Conservation Commission

North Dakota Department of Natural Resources

Ohio Department of Natural Resources

Pennsylvania Department of Environmental Protection

Texas Railroad Commission. I’ve estimated individual well production from well status & lease production data, as these are otherwise not provided. Because of this, I recommend looking at larger samples (>50 wells) before drawing conclusions. About 7% of the horizontal Permian wells in Texas are excluded, as these were mixed with too many vertical wells on a lease, making reasonable well profile estimations impossible. Formation data in Texas is only available on lease level; therefore in cases where wells on the same lease are drilled into different formations, this information is not accurate.

Wyoming Oil & Gas Conservation Commission

FracFocus.org

====BRIEF MANUAL====

The above presentation has many interactive features:

You can click through the blocks on the top to see the slides.

Each slide has filters that can be set, e.g. to select individual or groups of operators. You can first click “all” to deselect all items. You have to click the “apply” button at the bottom to enforce the changes. After that, click anywhere on the presentation.

Tooltips are shown by just hovering the mouse over parts of the presentation.

You can move the map around, and zoom in/out.

By clicking on the legend you can highlight selected items.

Note that filters have to be set for each tab separately.

The operator who currently owns the well is designated by “operator (current)”. The operator who operated a well in a past month is designated by “operator (actual)”. This distinction is useful when the ownership of a well changed over time.

If you have any questions on how to use the interactivity, or how to analyze specific questions, please don’t hesitate to ask.